Mark Landsbaum: U.S. becoming California becoming Greece

Nov. 11, 2012

Updated Aug. 21, 2013 1:17 p.m.

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Flanked by children Rhianna Smith, 4, left, and Xavier Valencia, 7, California Gov. Jerry Brown appears at a rally for precinct walkers from the Service Employees International Union (SEIU), urging they go all out in support of Proposition 30, in downtown Los Angeles, Nov. 3, 2012. Associated Press photo

Flanked by children Rhianna Smith, 4, left, and Xavier Valencia, 7, California Gov. Jerry Brown appears at a rally for precinct walkers from the Service Employees International Union (SEIU), urging they go all out in support of Proposition 30, in downtown Los Angeles, Nov. 3, 2012. Associated Press photo

The nation has opted to become more like California, and California even more like itself, which is to say, the state has taken another long stride toward becoming Greece on the Pacific.

In Tuesday's election, Republicans held the House of Representatives, and the Democrats the U.S. Senate. But arguably, the nation nudged further to the blue side of the political spectrum, as voters rejected Republican Mitt Romney and doubled down on the decidedly liberal leadership of Democrat Barack Obama for four more years.

In California, Democrats gained a two-thirds supermajority of both houses of the Legislature for the first time in most Californians' lifetime. When the new legislative session begins, Democrats will be able to raise taxes without a single Republican vote, and also approve constitutional amendments and urgency legislation. In short, whatever Democrats want to do, they will have no meaningful Republican opposition.

What does all this mean? For Democrats, it may be the best news since the income tax, the mother's milk of Big Government.

Overall, the nation probably isn't any bluer at ground level than four years ago. Indeed, the president received several million fewer votes than in 2008. But the nation effectively handed the reins of power to a bluish leader already noted for a propensity for ruling without the consent or even advice of Congress. That effectively makes government bluer than when Barack Obama needed congressional help to make things happen. Obama also now is largely unfettered by political considerations, his last campaign behind him.

Thanks to Republicans controlling the House, the president is unable to ram through legislation as he did in 2010 with Obamacare. But he certainly will effectively legislate with an expected flood of executive orders and regulations from myriad administration bureaus, not the least of which is the Environmental Protection Agency and the Obamacare overlords at Health and Human Services.

Some may argue that, based on exit polls and because Republicans' retained House control, the president has no mandate for bigger government, or for more regulations or for higher taxes. What that analysis overlooks is the disconnect between people who tell pollsters they favor smaller, less-intrusive, less-costly government, but in the next breath demand government-provided benefits, favored treatment and, in the case of businesses, punishment of their competitors.

The reliance on big, costly government intruding in this way into private lives is perhaps best exemplified in California, and Tuesday's election only emboldened that attitude.

"We have big issues," Gov. Jerry Brown said in the election's wake. "We still have a divided state, between, you know, the red and the blue. But we have a predominant Democratic majority now in the Legislature, and the challenge is, what can we do with it?"

Considering what Brown and fellow blues already have done, his words are ominous. "California moved farther to the left with a big push from public employee unions," GOP California chairman Tom Del Beccaro commented about the election results.

Chapman University demographer Joel Kotkin told the Wall Street Journal earlier this year that demographic changes coupled with increasingly progressive policies drive out moderates and conservatives from California's middle class. He concluded that, "increasingly the only ones fit to survive in California are the very rich and those who rely on government spending."

Welfare recipients "aren't leaving," Kotkin said. "Why would they? They get much better benefits in California or New York than if they go to Texas. In Texas the expectation is that people work."

California may be in the forefront of government dependency, but the nation is following the same trajectory. The conservative Heritage Foundation says 70.5 percent of federal spending goes to dependency-creating programs for housing, food, income, student aid and other assistance, "once considered to be the responsibility of individuals, families, neighborhoods, churches and other civil society institutions."

Nationally, in 2010 welfare spending increased 40 percent over two years. About 100 million people, nearly a third of the population, receive monthly aid from one or more of the 80-plus means-tested aid programs. Annual welfare spending soon will reach an unprecedented $1 trillion. The Senate Budget Committee found last year that the U.S. essentially spent $61,194 to support welfare programs per each household living below the poverty line, based on data from the Census, Office of Management and Budget and Congressional Research Services. That, incidentally, is 2.5 times the amount actually pocketed by each household, revealing the costly administration of government's handout machinery.

In fiscal 2011, a record 70.4 million Americans were enrolled in Medicaid, the health program intended for the poor. That's about 22 percent of the population, or more than one in five Americans.

In these respects the nation is becoming increasingly like California, where disproportionate numbers of residents draw welfare, where gratuitous spending on public infrastructure, like a 200-mph train abounds, and where income and sales taxes, as a result of the election, now are the highest in the country.

Critics of the Obama administration sometimes accuse the president of transforming America into something like the social democracies of Europe, where Big Government's guiding hand meddles intrusively in private industries, and where the social safety net is laced with luxuriant entitlements that, incidentally, carry bankrupting price tags.

But actually, the Obama administration is transforming the nation into California, where regulations of the private sector choke economic growth, tax burdens stifle job creation, and entitlements rival anything Europe has to offer. How many Europeans retire, as do some California public employees, with a quarter century or more of life expectancy and retirement checks approaching 100 percent of their former top salary?

The U.S. is trending toward California. Welfare spending is at record highs nationally, but California accounts for 33 percent of the nation's welfare recipients, although the state has 13 percent of the nation's population. Welfare is so endemic that even Hollywood is on the dole. The governor signed a two-year extension of tax credits for film and television production to reduce by 20 percent to 25 percent some companies' sales and income taxes. As with most tax credits, this benefit isn't extended to all industries, but only to a favored few to essentially be subsidized by other taxpayers who pick up the slack.

A case can be made that in California, not only welfare, but the other roots of fiscal calamity – overregulation, bureaucracy, high taxes and public worker unionization – are aggravated beyond even Washington's excesses.

That's because, as Newt Gingrich told the Register's Editorial Board early this year, California is a harbinger of things to come for the nation. If it's not apparent by now, that is not good news.

A Reuters news agency headline last week announced: "Victory Puts Obama In Position To Expand Government's Reach." If Obama needs advice, he might ask California Gov. Jerry Brown. After all, Obama couldn't get a Democratic-controlled Congress to adopt a costly, economy-stifling carbon cap-and-trade regimen, but Brown's got one up and running.

Greece created a welfare state that similarly suffocates the free market, and now faces grave consequences. European governments and the European Central Bank are arguing about whether to forgive some of what Greece owes, or to give more bailout loans. Will European bankers bail out California? The United States?

Welfare states can't last forever. The inevitable collapse occurs because it is unsustainable to spend more than comes in. The required higher taxes eventually hit a ceiling of political acceptability, although California seems intent on finding that upper limit, and may succeed now that Republicans have been removed as legislative impediments.

The nation's route to Greece through California may be avoidable, but not as long as those steering the ship of state continue missing the point: government's proper role is not to provide things, but to protect rights.

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